Carrying amount should be $60k. And why? Think of it from this angle: if it was initially recognized at $90k, Depriciation-20x6: $15 (90k/6years) Depriciation-20x7: $15 (90k/6years) At the end of 20x7: $90k-$15k-$15k =$60k. Alternatively, $30k was added to the $50k carrying amount to have 80k $20k depreciation was taken out to P&L. $80k- $20k = $60k carrying amount. Another option, following his explanation: the 30k recognized as liability is split into 2: 20k taken to P&L and 10k added to the asset’s carrying amount of 50k. that also give you 60k. Sure this helps!!
please does that mean the liability grant account will have a credit balance of 60000 dollars? if that is the case i don't see any sign of repayment there. I was thinking you will use 30000 at the second phase of the journal entry you made to offset the credit entry in the liability grant. please help me understand cos I didn't get what you did.
Thanks so much, So what would have been the Carrying amount of the Equipment @ 31.12.20x7 in SOFP?
Carrying amount should be $60k. And why?
Think of it from this angle:
if it was initially recognized at $90k,
Depriciation-20x6: $15 (90k/6years)
Depriciation-20x7: $15 (90k/6years)
At the end of 20x7: $90k-$15k-$15k =$60k.
Alternatively,
$30k was added to the $50k carrying amount to have 80k
$20k depreciation was taken out to P&L.
$80k- $20k = $60k carrying amount.
Another option, following his explanation:
the 30k recognized as liability is split into 2:
20k taken to P&L and 10k added to the asset’s carrying amount of 50k. that also give you 60k.
Sure this helps!!
please does that mean the liability grant account will have a credit balance of 60000 dollars? if that is the case i don't see any sign of repayment there. I was thinking you will use 30000 at the second phase of the journal entry you made to offset the credit entry in the liability grant. please help me understand cos I didn't get what you did.
Thank you sir
No worries.